Small and medium enterprises (SMEs) account for roughly 85 per cent of all businesses in TT, contributing at least 30 per cent to the nation's GDP. Despite its contribution, this sector is still very much exposed to global shocks and hazards, such as supply chain disruptions, power outages, cyberattacks, the effects of climate change and other potential shocks.
These are the findings of the Employers' Consultative Association of TT (ECA) in a report - Perspectives on Business Resilience in TT, launched virtually on Wednesday. The ECA, through surveys and interviews among its 700 membership with agencies such as the Ministry of Trade and Industry, Nedco and UTT, identified some of the main challenges facing the SME sector and its preparedness to face disasters and shocks.
It found that, very often, SMEs do not have sufficient plans in place to face hazards, shocks and changes that may come their way. The ECA suggested that an updated policy for SME resilience which focuses on collaboration with the public sector is needed.
Just like big businesses, SMEs were battered by shocks over the last three years, against the backdrop of the covid19 pandemic, which affected supply chains to TT, access to finance and higher inflation rates among other issues.
In its survey, the ECA asked businesses about the hazards they faced. It was no surprise that 27.6 per cent of respondents identified pandemics and epidemics as among the main hazards out of 16 options presented to them. The second highest identified hazard was utility outages, (14.2 per cent) followed by ransomware and cyberattacks (10.2 per cent).
Businesses that listed its own hazards included inflation and pandemic-related vaccine hesitancy.
The ECA found that almost half of the SMEs surveyed (48 per cent) were hit with at least one, and up to three major hazardous events in the past 24 months. About 30 per cent, mostly in essential and professional services, were able to maintain operations by pivoting to remote work during lockdowns and said they faced no major hazards. About 12 per cent - mostly from the manufacturing sector and the accommodation and food service industries - said they were constantly under fire from hazards.
Despite identifying these hazards, the ECA found that not much is being done in the SME sector to buffer against such potential disasters. The report revealed that 22 per cent conducted a risk assessment, 12 per cent have developed recovery plans, 20 per cent have developed a business continuity plan and 30 per cent developed an emergency response plan. But 15 per cent did not have a plan at all.
The report said most respondents that had a positive response came from an industrial-type sector.
The survey also indicated that while half had access to contingency funds the other half either did not (30 per cent) or didn't know if they did (20 per cent).
It also showed that there was only a 17.5 per cent collaboration with peer organisations to exchange risk-related information and share early warning systems.
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